How to Prequalify Homebuyers
Your goal is to find a buyer with money who is ready to move. Seems straight forward enough, right? Unfortunately, there are plenty of people “shopping” without any real interest, and there are also some willing to move tomorrow if they can find a lender willing to take on another risk case. Spending your time with one of these types of buyers could cause you to miss out on the one buyer you should have been focused on all along. Below are Homes Re-Imagined’s tips to prequalify homebuyers.
1. Ask for a Pre-Approval Letter – Being prequalified is great, but a pre-qualification is not a guarantee. If you really want to know if someone is serious and ready to close immediately ask if they have a pre-approval letter. If they give you a pre-qualification letter at least you know they have already spoken with a lender. If not, they may just go get that preapproval for you right away. If you get the runaround and excuses, they may just be killing time.
2. Make Your Minutes Matter – Your time is valuable and your schedule is full. One of the easiest ways to avoid wasting time is by making sure you are talking with all decision makers. Do you really want to show a house and answer countless questions only to find out the person you are talking to is the sister to someone home shopping? All you have to do is ask, “Will there be anyone else involved with making the decision?”
3. Hire a Mortgage Broker – If you are selling your home on your own, you may want to consider hiring a local mortgage broker to at least help with the pre-qualification.
4. Create a Qualification Worksheet – Answers to a few simple questions will tell you everything you need to know about a buyer. Don’t be scared to ask about income and debt. Anyone serious about buying a home should know these topics are going to come up eventually. If you are not comfortable asking in person send the questionnaire by email. If you are an agent, you can just put it on your website.
5. Soft Pull Credit Report – You don’t want to make a hard inquiry on the credit report of someone trying to obtain a home mortgage. Tools like ScoreApprove are helpful in that they allow you to do a soft pull. You get the information you need to prequalify while also protecting their credit.
Making the up front effort to prequalify homebuyers will save you time and a lot of unnecessary frustration in the long run. If they haven’t already been prequalified by a lender, ask questions and do a soft pull on their credit report to make sure they are serious and able to financially qualify.